http://seekingalpha.com/article/155250-wednesday-outlook-spin-city Lots of charts for you chart lovers. We're in for one hell of a nasty ride. Consumers aren't shopping except for what they can literally steal or on necessities, and that's the red flag waving warning of depression-like psychology. Just wait for the temporary, sharp stimuli of 'cash for clunkers' to wear off, after it satisfies the only pent-up demand for cars that existed. Ouch.
It's bad out there. Just look at this poor thing, she can't even afford a decent pair of jeans. <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2546130
Yeah, but look at the Retail Holders....still holding above 80 ? THAT'S CRAZY. This market is anticipating a return of the consumer....but is that wrong ? The best play here may be credit spreads in RTH (80-85 for instance).
Then you have this a-hole hedgefund manager scaring the entire market with a huge long bet on RTH. Of course, he's really sweating bullets right now...he's just above break-even at 83.61. Anything under 83 and he starts to lose. 2 days to go ! September short positions should prove to be a wise bet. 8/13/2009 2:51:44 PM The Retail HOLDRS Trust (RTH: sentiment, chart, options) has seen some rather unusual options activity today. Options traders have focused their attention on the trust's August 85 puts and calls, with each trading about 2,500 contracts. Taking a closer look, it appears that someone has entered a synthetic long position on RTH. At 9:57 a.m. Eastern time, 2,000 August 85 calls traded on the International Securities Exchange (ISE) for the ask price of $0.80, or $80 per contract. Meanwhile, 2,000 August 85 puts traded on the same exchange at the same time for the bid price of $1.90, or $190 per contract. The result is that the trader pocketed a credit of $220,000, which he retains as long as RTH closes above the 85 level on Friday next week. Furthermore, the trader can add to his profit should RTH rally, due to the purchased August 85 call. All in all, this is a very bullish short-term play on the retail sector.
Markets are usually stupid. It is what it is. And the market is probably anticipating severe inflation rather than any consumers returning.
That SOB is still breaking even on this bet...83 and change. Is he going to hold till expiration tomorrow ? You bet. The cost to cover is too high now.
Sears Holdings : issues a terrible report and RTH STILL GOES HIGHER. Now near 84. This is pretty incredible....and that hedgy is really lucky IMHO.